C.M.A.(MD)No.944 of 2016

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

Date of Reserving the JudgmentDate of Pronouncing the Judgment

30.01.2024 20.02.2024

CORAM:

THE HONOURABLE DR.JUSTICE G.JAYACHANDRAN

and

THE HONOURABLE MR.JUSTICE C.KUMARAPPAN

C.M.A.(MD)No.944 of 2016

and

C.M.P.(MD)No.8489 of 2016

T.Manivannan,

Proprietor,

M/s.N.K.R. Corporation,

122, Madhavaram High Road (North),

Perambur, Chennai – 600 011. ... Appellant

vs.

1.The Commissioner of Customs,

Custom House, New Harbour Estate,

Tuticorin – 628 004.

2.Customs, Excise and Service Tax Appellate Tribunal,

South Zonal Bench, Shastri Bhavan,

No.26, Haddows Road,

Chennai – 600 006. ... Respondents

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C.M.A.(MD)No.944 of 2016

PRAYER: Civil Miscellaneous Appeal filed under Section 130(1) of the Customs

Act, 1961, against the final order No.40598/2016, dated 11.04.2016, in Appeal

No.C/26/2008-SM, on the file of the second respondent Tribunal.

For Appellant : Mr.B.Satish Sundar

For Respondents : Mr.R.Nandakumar

Senior Panel Counsel for Central Govt.

JUDGMENT

DR.G.JAYACHANDRAN, J.

and

C.KUMARAPPAN, J.

The Civil Miscellaneous Appeal is directed against the Final Order No.

40598/2016, dated 11.04.2016, in Appeal No.C/26/2008-SM, passed by the

Customs Excise and Service Tax Appellate Tribunal, South Zone Bench, Chennai,

confirming the order dated 30.11.2007, passed in Order–in-Original No.64/2007,

by the Commissioner of Customs, Tuticorin.

2. On 24.03.2006, on specific information, DRI Tuticorin, conducted

search of the Container No.CRXU 169704-8 covered under the shipping Bill No.

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1590098 filed by M/s.Freedom Impex, Tuticorin, by its Proprietor John Alexander

for export of 104 crates of gypsum boards. M/s.FG Global Resources, Malaysia,

was shown at the consignor.

3. The search of the cargo leads to recovery of 1.650 MTs. of red sanders,

prohibited goods under the Customs Act. The red sanders were kept concealed

under gypsum boards in 94 crates by creating a cut cavity inside the pile of

gypsum boards. Following the seizure, the office premises of M/s.Freedom Impex

was searched. The Proprietor John Alexander was secured and his statement

under Section 108 of the Customs Act was recorded on 26.03.2006. The said

statement found inclupatory in nature, admitting the mis-declaration also

indicting T.Manivannan, the appellant herein as the abettor and supplier of the red

sander logs, which is a prohibited goods.

4. Thereafter, Manivannan’s shop premises and godown were searched.

Nothing incriminating was recovered. He was served with a show cause notice

and confronted with the statement of John Alexander incriminating him in the

offence. Manivannan denied any knowledge about the attempt of illegal export of

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red sanders. After recording his statements on three different dates, Manivannan

was arrested on 19.06.2006 and also detained under COFEPOSA Act. However,

the detention order was later revoked by the Government based on the report filed

by the Advisory Board.

5. After taking into consideration the statements of John Alexander

implicating Manivannan and the statements of Manivannan, the explanations

given by Manivannan to the show cause notice dated 13.09.2006 and the

submissions made during the personal hearing, the Order-in-Original, dated

30.11.2007, was passed holding that the red sanders totally 1500 pieces, weighing

1.6450 MTs. having market value of Rs.49.50 Lakhs are liable for absolute

confiscation to the Government under Section 113 of the Customs Act, 1962.

Further, the Commissioner of Customs also held that T.Manivanan (appellant

herein), who is the Proprietor of M/s.N.K.R. Corporation, Chennai, had sent the

prohibited red sanders to John Alexander for onward export to Malaysia illegally.

The voluntary confessional statement given under Section 108 of Customs Act

corroborated by other evidences on record is sufficient to prove the commission

of offence under the Customs Act. Hence, passed the following order:-

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(i) To confiscate the seized red sanders worth Rs.49.50 Lakhs absolutely.

(ii) The gypsum board used to conceal the contraband viz., the red sanders

which was estimated to be worth approximately Rs.0.88 Lakhs ordered to be

confiscated under Section 119 of the Customs Act with option to the owner

M/s.Freedom Impex, Tuticorin, to redeem the same within 30 days on payment of

a fine of Rs.10,000/- under Section 125 of the Customs Act.

(iii) A penalty of Rs.5 Lakhs was imposed on Manivannan (appellant)

under Section 114 (1) of the Customs Act.

6. To set aside the order imposing penalty of Rs 5 Lakhs, T.Manivannan

preferred appeal under Section 129-A of the Customs Act and same was taken up

for consideration by the CESTAT in Appeal No.C/26/2008-SM. The said appeal

came to be dismissed holding that the contention of the appellant / T.Manivannan

that penalty cannot be imposed based on the uncorroborated statement of a co-

accused is not sustainable in view of the judgment of the Hon'ble Supreme Court

in Naresh J Sukhawani vs. Union of India [1996 (83) ELT 258 (SC)].

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7. Final Order No.322/2010 of CESTAT, dated 17.03.2010, in Appeal

No.C/26/2008 was challenged by the appellant before this Court by filing C.M.A.

(MD)No.1156 of 2010 under Section 130(1) of the Customs Act. The Division

Bench of this Court at the time of admitting the appeal, granted stay of the order

on condition that the appellant deposits 50% of the penalty and framed the

following substantial questions of law for consideration:-

''(a)Whether the 1

st

Respondent Tribunal as a final

fact finding body ought to have asked for corroboration on

material particulars in the statement of co-accused John

Alexander by independent evidence/material so as to rely on

the same for suspending the penal liability against the

Appellant?

(b) Whether the 1

st

Respondent Tribunal has

committed an error of jurisdiction in not even adverting to or

evaluating the intrinsic worth of the exculpatory statements

of the Appellant, which are on record in juxtaposition to the

so called confessional and voluntary statements of the said

John Alexander?''

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8. After considering the submissions of the rival parties, the Division

Bench of this Court observed, no discussion has been made with regard to the

factual aspects put forth on the side of the appellant. Then held, the order passed

by the appellate authority is not legally and factually sustainable and the same is

liable to be set aside. Accordingly, the Division Bench of this Court allowed Civil

Miscellaneous Appeal on 31.01.2014 and remitted the matter back to CESTAT to

consider the factual aspects put forth on either side and also consider recent

decisions rendered by the Hon'ble Supreme Court and pass suitable orders on

merits.

9. On remittal, the CESTAT re-heard the appeal and dismissed the appeal

on 11.04.2016 holding, when John Alexander (co-accused) disclosed the

offending goods (red sanders) was supplied by the appellant Manivannan, the

appellant has not discarded this statement by leading any cogent evidence.

Alexander, who is not a man of means, had acted as conduit of the appellant to

export the same for a consideration of Rs.2,00,000/-. The appellant failed to

controvert the cash payment of Rs.40,000/- made by him to Alexander towards

consideration through the carrier of the offending goods. The statement of

Alexander recorded before his arrest and during the judicial custody in the prison,

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is binding. The identification of the appellant’s photo by Alexander in the

presence of the Jail Superintendent never challenged. The statement of Alexander

is so credible and believable to use it against the appellant, the co-accused and it

is not only the statement of Alexander, who indicted appellant to the scrutiny of

the law, but also the goods that came from him was independent evidence

showing his involvement.

10. The above finding and the reasoning for the conclusion is targeted in

the appeal preferred by the appellant. The learned counsel for the appellant

reading extensively the impugned order of the CESTAT commented that it is a

perverse order to the core and suffers misreading of facts and misapplication of

law. He submitted that certain observations made in the impugned order are not

borne by record, but sourced from the fertile imagination of the Author. He

submitted that except the uncorroborated inculpatory statement of the co-accused

John Alexander, there is no piece of evidence, which incriminates the appellant.

The three statements of the appellant recorded under Section 108 of the Customs

Act is total denial and exculpatory in nature. While so, even the facts found in the

statement of John Alexander, which are verifiable, were not verified by the

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Department and placed before the Tribunal. However, the Tribunal has held that it

is the burden of the appellant to rebut those facts, which are facts not existing. He

further submitted that the judgments of the Hon'ble Supreme Court rendered in

Surjeet Singh Chhabra vs. Union of India reported in 1997 (89) E.L.T. 646

(SC) and K.I.Pavunny vs. Assistant Collector (HQ.), Central Excise

Collectorate, Cochin reported in 1997 (90) E.L.T. 241 (SC) were misapplied to

the facts of the case by the Tribunal and the facts were tweaked to suit the case of

the Department.

11. The learned Senior Panel Counsel appearing for the Customs submitted

that, it is well settled principle of law that the statement recorded under Section

108 of the Customs Act is a substantive piece of evidence not only against the

maker of the statement, but also against the co-accused. No corroboration to the

statement is required. The appellant was given adequate opportunity to provide

rebuttal evidence, but nothing produced by him to prove his innocence. Apart

from the two judgments cited by the Tribunal, even recently, the Division Bench

of the Karnataka High Court in Commissioner of Customs, Mangaluru vs.

Imtiaz Ahmed (2023 (8) Centax 2 (Kar.)) by its order dated 15.12.2022, has

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held that the statement recorded under Section 108 of Customs Act, 1962, by

Customs Officer cannot be construed as a confessional statement of co-accused

and is admissible as an independent piece of evidence without any corroboration.

12. The question of law involved in this Civil Miscellaneous Appeal

against the order of CESTAT is as under:-

Whether inculpatory statement of co-noticee be a

conclusive proof against co-noticee without

corroboration?

13. Section 108 (1) of the Customs Act, empowers any Gazetted Officer of

customs shall have power to summon any person whose attendance he considers

necessary, either to give evidence or to produce a document or any other thing in

any inquiry which such officer is making under the Customs Act. Under Section

108(3) of the Act, all persons so summoned are bound to attend, either in person

or by an authorised agent, as may be directed. All persons so summoned shall be

bound to state the truth. Section 108(4) of the said Act provides that every such

inquiry as aforesaid shall be deemed to be a judicial proceeding within the

meaning of Sections 193 and 228 of the Indian Penal Code, 1860.

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14. The Constitutional Bench of the Hon'ble Supreme Court as early as

1960 in Amba Lal vs. Union of India and others (AIR 1961 SC 264) has held

that Customs Officers are not judicial Tribunal and the proceedings before them

are not a prosecution. However, when the relevant provisions under the Sea

Customs Act and Land Customs Act provides for confiscation and imposition of

penalty, the act gets the penal character. In such a situation, the fundamental

principles of criminal jurisprudence and of natural justice must necessarily apply.

15. In Illias vs. Collector of Customs, Madras (1969 (2) SCR 613), the

Hon'ble Supreme Court made it clear that though the Customs Officers are

invested with many powers of Police Officer in matters relating to arrest,

investigation and search, they do not thereby, become a Police Officer within the

meaning of Section 25 of the Evidence Act and so the confession statements made

by an accused person to a Customs Officer is admissible in evidence against him.

16. Having consistently held that the statement given to the Customs

Officer recorded under Section 108 of the Customs Act is admissible in evidence,

the Hon'ble Supreme Court has also considered the evidentiary value of retracted

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confession statements alleged to have been obtained under force, threat or

coercion. The three Judges Bench of the Hon'ble Supreme Court in K.I.

Pavunny vs. Assistant Collector (H.Q.) Central Excise Collectorate, Cochin

(cited supra), after referring to the earlier Constitutional Bench decisions

rendered in Haricharan Kurmi and Jogia Hajam vs. State of Bihar (AIR 1964

SC 1184) and Nisshi Kant Jha vs. State of Bihar (1969 (1) SCC 347) and also

few more judgments including Naresh J. Sukhawani vs. Union of India (1995

Supp (4) SCC 663) and Surjeet Singh Chhabra vs. Union of India (1997 (3)

SCC 721 : 1997 (89) ELT 646), held as under:-

''25. It would thus be seen that there is no prohibition

under the Evidence Act to rely upon the retracted confession

to prove the prosecution case or to make the same basis for

conviction of the accused. Practice and prudence require

that the court could examine the evidence adduced by the

prosecution to find out whether there are any other facts and

circumstances to corroborate the retracted confession. It is

not necessary that there should be corroboration from

independent evidence adduced by the prosecution to

corroborate each detail contained in the confessional

statement. The court is required to examine whether the

confessional statement is voluntary; in other words, whether

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it was not obtained by threat, duress or promise. If the court

is satisfied from the evidence that it was voluntary, then it is

required to examine whether the statement is true. If the

court on examination of the evidence finds that the retracted

confession is true, that part of the inculpatory portion could

be relied upon to base the conviction. However, prudence

and practice require that court would seek assurance

getting corroboration from other evidence adduced by the

prosecution. (Emphasis added)

26. ...... As noted, the object of the Act is to prevent

large-scale smuggling of precious metals and other dutiable

goods and to facilitate detection and confiscation of

smuggled goods into, or out of the country. The

contraventions and offences under the Act are committed in

an organised manner under absolute secrecy. They are

white-collar crimes upsetting the economy of the country.

Detection and confiscation of the smuggled goods are aimed

to check the escapement and avoidance of customs duty and

to prevent perpetration thereof. In an appropriate case when

the authority thought it expedient to have the contraveners

prosecuted under Section 135 etc. separate procedure of

filing a complaint has been provided under the Act. By

necessary implication, resort to the investigation under

Chapter XII of the Code stands excluded unless during the

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course of the same transaction, the offences punishable

under the IPC like Section 120-B etc. are involved.

Generally, the evidence in support of the violation of the

provisions of the Act consists in the statement given or

recorded under Section 108, the recovery panchnama

(mediator's report) and the oral evidence of the witnesses in

proof of recovery and in connection therewith. This Court,

therefore, in evaluating the evidence for proof of the offences

committed under the Act has consistently been adopting the

consideration in the light of the object which the Act seeks to

achieve.''

17. The question whether the confession statement of an accused could be

relied upon to prove the prosecution case against the co-accused tried in the same

case, came up for consideration in Kashmira Singh vs. State of Madhya

Pradesh (AIR 1952 SC 159) before Three Judges Bench of the Hon'ble Supreme

Court and later by four Judges Bench in Balbir Singh vs. State of Punjab (AIR

1957 SC 216) and subsequently before the Constitutional Bench in Haricharan

Kurmi and Jogia Hajam vs. State of Bihar (AIR 1964 SC 1184). The march of

law on this legal point succinctly extracted in K.I.Pavunny's case as below: -

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''21. In Kashmira Singh case [(1952) 1 SCC 275 :

AIR 1952 SC 159 : 1952 SCR 526], the co-accused,

Gurcharan Singh made a confession. The question arose

whether the confession could be relied upon to prove the

prosecution case against the appellant Kashmira Singh. In

that context, Bose, J. speaking for a Bench of three Judges

laid down the law that the Court requires to marshal the

evidence against the accused excluding the confession

altogether from consideration. If the evidence dehors the

confession proves the guilt of the appellant, the confession of

the co-accused could be used to corroborate the prosecution

case to lend assurance to the Court to convict the appellant.

The Court considered the evidence led by the prosecution,

dehors the confession of co-accused and held that the

evidence was not sufficient to bring home the guilt of

appellant Kashmira Singh of the charge of murder. The

appellant was acquitted of an offence under Section 302 IPC

but was convicted for the offence under Section 201 IPC for

destroying the evidence of murder and sentenced him to

seven years' rigorous imprisonment. This decision was

considered by a four-Judge Bench in Balbir Singh v. State of

Punjab [AIR 1957 SC 216 : 1957 Cri LJ 481] wherein it

was held that if there is independent evidence, besides the

confession, the rule that the confession could be used only to

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corroborate the other evidences loses its efficacy. Therefore,

it was held that if the retracted confession is believed to be

voluntary and true, it may form the basis of a conviction but

the rule of practice and prudence requires that it should be

corroborated by independent evidence. Therein also, for the

charges of capital offence, the trial court did not accept the

confessional statement of the co-accused containing

inculpatory and self-exculpatory statement. The High Court

reversed the acquittal and convicted the accused, accepting

that part of the confessional statement of the accused which

was corroborated from other evidence. This Court upheld the

conviction and held that it is not necessary that each item of

fact or circumstance mentioned in the confessional statement

requires to be corroborated separately and independently. It

would be sufficient if there is general corroboration. The

ratio in Kashmira Singh case [(1952) 1 SCC 275 : AIR

1952 SC 159 : 1952 SCR 526] was referred to.

22. In Hem Raj v. State of Ajmer [1954 SCR 1133 :

AIR 1954 SC 462] a three-Judge Bench to which Bose, J.

was a member, was to consider whether retracted confession

of an accused could be corroborated from the material

already in the possession of the police prior to the recording

of the confession. Therein the confession was recorded under

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Section 164 of the Code during the committal proceedings

but at the trial it was retracted. This Court held that the

evidence already on record of the police could be used to

corroborate the retracted confession.

23. In Haricharan Kurmi v. State of Bihar [AIR 1964

SC 1184 : (1964) 2 Cri LJ 344], a Constitution Bench was to

consider as to when the confession of a co-accused could be

used as evidence under Section 3 of the Evidence Act. It was

held that the confession of a co-accused cannot be treated as

substantive evidence. If the Court believed other evidence

and felt the necessity of seeking an assurance in support of

its conclusion deducible from the said evidence, the

confession of the co-accused could be used. It was, therefore,

held that the Court would consider other evidence adduced

by the prosecution. If the Court on confirmation thereof

forms an opinion with regard to the quality and effect of the

said evidence, then it is permissible to turn to the confession

in order to receive assurance to the conclusion of the guilt of

the accused. It is, thus, seen that the distinction has been

made by this Court between the confession of an accused

and uses of a confession of the co-accused at the trial. As

regards the confession of the accused and corroboration to

the retracted confession, in Girdhari Lal Gupta v. D.N.

Mehta, Asstt. Collector of Customs [(1970) 2 SCC 530 :

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1970 SCC (Cri) 496], a Bench of two Judges considered and

held that if the evidence of an investigating officer is found

to be reliable, whether it can be used to corroborate the

evidence depends on the facts of each case. In that case,

relating to the offence under Foreign Exchange Regulation

Act, it was held that the evidence of the investigating officer

and other evidence could be used to corroborate the

recoveries made of the Indian currency being exported. This

Court upheld the conviction of the accused.''

18. In Naresh J. Sukhawani vs. Union of India reported in 1995 Supp (4)

SCC 663, the appellants contended that the statement of co-accused could be

used only to corroborate other evidence as one of the circumstances under Section

30 of the Evidence Act, but it cannot be used as substantive evidence without

corroboration from other independent evidence. This contention was negatived by

the Bench of the Hon'ble Supreme Court, consisting two Judges holding that, it

must be remembered that the statement made before the Customs officials is not a

statement recorded under Section 161 of the Criminal Procedure Code, 1973.

Therefore, it is a material piece of evidence collected by Customs officials under

Section 108 of the Customs Act. The material which incriminates the co-noticee

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inculpating him in the contravention of the provisions of the Customs Act can

certainly be used to connect the co-noticee. It can, therefore, be used as

substantive evidence.

19. From the judgments referred to above, the dictum of the Hon'ble

Supreme Court, it could be safely concluded that ;-

(a) The statement recorded by a Customs Officer under Section 108 of the

Customs Act is substantive piece of evidence.

(b) The inculpatory statement of one noticee can be put against the co-

noticee.

(c) The inculpatory statement of the maker can be used against him without

corroboration.

(d) If the statement is retracted subsequently by the maker, the maker of the

statement has to prove the statement was obtained under threat, coercion or force.

(e) As far as the portion indicting the co-noticee, prudence requires, the

Court to examine whether there is any probability or circumstances to believe the

existence of the fact found in the portion of the statement which indicts the co-

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noticee. The cordinal principle an accomplice is unworthy of credit, unless he is

corroborated in material particulars never to be ignored.

(f) The portion of the statement indicting the co-noticee can be tested in

two ways, (i) statements regarding facts which are verifiable must be verified

based on evidence; and (ii) facts which are within the exclusive knowledge of the

co-noticee, presumption with the aid of Section 106 of the Evidence Act can be

drawn.

20. The learned counsel for the appellant referring the statements of the

appellant, which is exculpatory and total denial of his involvement in the alleged

abetment to export red sanders through John Alexander and the retracted

statement of John Alexander indicting the appellant submitted that, the statements

read as a whole, would clearly show that the Department failed to check the

veracity of facts, which are easily verifiable. Relying on the uncorroborated

statement of a tainted person is contrary to the law laid by the Hon'ble Supreme

Court.

21. Per contra, the learned counsel representing the Department heavily

relying upon the statement of John Alexander and the statements of appellant

T.Manivannan submitted that, the final fact finding authority namely, CESTAT

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had applied the principle of preponderance of probability and the principle fraud

vitiates all solemn proceeding and righly held, the appellant is liable to pay

penalty for abetting John Alexander to illegally export red sanders by

misdeclaring it as gypsum boards. The material seized and the statement of John

Alexander is sufficient to hold the appellant guilty. The statement of John

Alexander indicting the appellant T.Manivannan ought to have controverted with

material evidence by the appellant. Mere denial will not exonerate him from the

liability. The judgment of the Karnataka High Court in Commissioner of

Customs, Mangaluru vs. Imtiaz Ahmed (cited supra) holds the field as on date

and hence, the appeal is liable to be dismissed.

22. The scrutiny of the statement given by John Alexander on 26.03.2006,

incriminates the appellant T.Manivannan as the supplier of the red sanders. The

incriminating parts are:-

(1) Manivannan of Perambur, Chennai, came in contact with me through

Santhanameeran. He was also involved in smuggling sandalwood and red sanders

to foreign country.

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(2) In the month of February, 2006, I rang up to Manivannan and requested

him to arrange for smuggling of sandalwood or red sanders business to me. At

first, he did not agree to this. After speaking to him on many occasions, he agreed

to give red sanders for sending through Tutiorin Port.

(3) Manivannan sent red sanders keeping gypsum boards on top of them in

a lorry to the godown at Sugar Mill Colony, Tirunelveli, which I had taken on

rent.

(4) Manivannan sent red sanders totally in 1500 pieces. Long frame, small

frame and curved pieces each 500 numbers.

(5) He (Manivannan) told me to send these red sanders to the buyer's

address in Malaysia given by him. For smuggling, he gave advance of

Rs.1,00,000/-

(6) He gave Rs.40,000/- through the person, who came when red sanders

came in the lorry.

(7) He deposited in Chennai the balance Rs.60,000/- in my ICICI Bank

Account No.613905014790.

(8) After the cargo arrived, he sent the buyer's address in Malaysia through

KPN bus courier.

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(9) He (Manivannan) is residing at Perambur Highway Road. I do not know

his full address. He is having a garments manufacturing factory in Perambur High

Road. I do not know his contact phone number.

23. On 19.06.2006, further statement of John Alexander was recorded

while he was confined in Madurai Central Prison, being detained under

COFEPOSA Act. He was shown a computer print out of a photograph and asked

to identify. John Alexander has identified the person in the said photograph as

Manivannan. It is relevant to note that the identification of Manivannan through

photograph was after about three months from Manivannan was called to give his

statement. Incidentally, it was also on the day when he was arrested and remanded

to judicial custody.

24. From the appellant Manivannan, three statements were recorded. First

statement is on 31.03.2006, the second statement is on 04.04.2006 and the third

statement is on 19.06.2006. The scrutiny of these statements reveals that the

appellant had admitted that he know John Alexander of Tuticorin while he was

doing garment business in the name of M/s.Raja International during the year

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2000-2001. He recently spoke to Alexander over phone regarding alliance for his

daughter to verify the credential of the prospective bridegroom. When the

statement of John Alexander dated 26.03.2006 was shown to Manivannan and

asked to give his explanation, Manivannan after going through the statement, has

stated that he is noway connected with his (Alexander) statement. He has not

involved with Alexander in red sanders business. When he was asked about

whether he know about the Company by name, M/s.Freedom Impex, Tuticorin,

(the Company of John Alexander), Manivannan has replied in negative.

25. On 04.04.2006, when Manivannan appeared before the Assistant

Director, DRI, in response to the summons issued to him under Section 108 of the

Customs Act, he had stated that from the year 1999, his Company

M/s.N.K.R. Corporation possess permit to hold stock of red sanders and the

licence issued by D.F.O., Chengalpet Division, Kanchipuram District, is valid

upto 31.03.2006. To the query, whether his Company was booked for any offence

in respect of red sanders, he has answered in negative. Again, when the statement

of John Alexander recorded on 26.03.2006 shown to Manivannan and sought his

explanation, he had reiterated his earlier explanation dated 31.03.2006 and had

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C.M.A.(MD)No.944 of 2016

clarified further that he know him as Alex of Tuticorin and not as John Alexander.

He had denied the allegation that he arranged for transport of the red sanders

along with gypsum boards to Tirunelveli during the month of Janurary, 2006.

26. On 19.06.2006, Manivannan appeared before Senior Intelligence

Officer, D.R.I. on summoned and was asked to give further statement. Once

again, he was asked to explain about the statement of John Alexander, dated

26.03.2006, incriminating him. He had firmly denied it and stated that he was

noway connected with the consignment seized by D.R.I. at Tuticorin Port, which

was attempted to be exported by John Alexander of M/s.Freedom Impex. When

the statement of John Alexander recorded on 19.06.2006, in which he has

identified Manivannan through the photograph, the appellant had refused to

answer further.

27. At this juncture, it is to be noted, the records relied by the Department

indicates, Alexander was summoned under Section 108 of the Customs Act for

the second time and his statement was recorded on 19.06.2006 before the Jailer,

Central Prison, Madurai. The appellant, vide summon dated 15.06.2006, was

asked to appear before Senior Intelligence Officer, D.R.I., Chennai, on

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C.M.A.(MD)No.944 of 2016

19.06.2006 at 12.00 noon, to give evidence and produce documents in connection

with the seizure of red sanders from M/s.Freedom Impex. The appellant had

appeared before the Senior Intelligence Officer, D.R.I. at Chennai on 19.06.2006

in response to the summon. The statement recorded remain inconclusive with the

noting that the appellant refused to reply to the question when confronted with

the statement of John Alexander dated 19.06.2006, which was supposed to be

recorded on the same day at Madurai Central Prison. In the impugned order, the

conduct of the appellant his refusal to sign the statement been considered as an

attended circumstances to infer his guilty. Whereas, the time and sequence

apparently indicates that by all probability, the statement of John Alexander

purported to have recorded in Madurai Central Prison on 19.06.2006 could not

have reached Chennai and shown to the appellant on the same day at 12.00 noon,

when he appeared before the Senior Intelligence Officer, D.R.I. Further, by

recording that the appellant had refused to sign the statement, the Department has

made it as a reason to arrest him and produce before the Magistrate on the same

day at about 09.00 p.m.

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C.M.A.(MD)No.944 of 2016

28. The order of CESTAT, which is impugned in this appeal, to say the least

is smeared with perversity. Misapplication of law and distortion of facts found in

abundance in the impugned order. While remitting the matter back for re-

consideration, this Court, vide order dated 31.01.2014, ordered CESTAT being

the final fact finding authority, to look into the factual aspect put forth by both

parties and consider the recent judgments of the Hon’ble Supreme Court. Under

the guise of complying the direction, misread the statement of the appellant, by

recording that the appellant when interrogated by the Investigating Officer, has

admitted his trade in red sanders since 1999 to recover the loss in his garment

business, he exported red sanders in the name of M/s.N.K.R Corporation from

Chennai Port in the past and his refusal to sign the third statement as a reason to

presume his guilty.

29. The facts, such as the alleged payment of Rs.60,000/- through ICICI

Bank as remuneration for the illegal export and the alleged transit of Cargo from

Chennai to Tirunelveli by the appellant, were never verified, though they are

verifiable. The admission that the appellant is a licensed dealer in red sander and

he know the exporter John Alexander as Alex of Tutucorin is neither a fact to

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C.M.A.(MD)No.944 of 2016

corroborate the incriminating statement of co-noticee, indicting the appellant. The

principle of preponderance of probability been wrongly invoked by CESTAT

without any fact either circumstantial or by way of corroboration relate the

appellant to the Cargo seized by D.R.I. Not even a remote material available to

believe the statement of a tainted person.

30. The decisions of the Hon'ble Supreme Court in K.I.Pavunny's case

(cited supra) or in Naresh J.Sukhawani's case (cited supra) and the decision of

the Karnataka High Court in Imtiaz Ahmed's case (cited supra) does not

vouchsafe the impugned order holding the appellant guilty based on the

confession of the co-accused without semblance of corroboration or

circumstances. If statement of an accomplice accepted without material

corroboration, it will be travesty of justice.

31. Therefore this Court holds that the order of the CESTAT impugned in

this appeal is liable to be set aside, being perverse and contrary to law.

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C.M.A.(MD)No.944 of 2016

32. In the result, this Civil Miscellaneous Appeal is allowed. There shall be

no order as to costs. Consequently, connected Miscellaneous Petition is closed.

Index : Yes [G.J., J.] & [C.K., J.]

NCC : Yes 20.02.2024

smn2

To

1.The Commissioner of Customs,

Custom House, New Harbour Estate,

Tuticorin – 628 004.

2.The Customs, Excise and Service Tax Appellate Tribunal,

South Zonal Bench, Shastri Bhavan,

No.26, Haddows Road,

Chennai – 600 006.

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C.M.A.(MD)No.944 of 2016

DR.G.JAYACHANDRAN , J.

and

C.KUMARAPPAN, J.

smn2

PRE-DELIVERY JUDGMENT MADE IN

C.M.A.(MD)No.944 of 2016

20.02.2024

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